30th Apr 2007 07:01
Sierra Leone Diamond Company Ld30 April 2007 For immediate release 30 April 2007 Sierra Leone Diamond Company Limited ("SLDC" or "the Company") Final Results for the year ended 31 December 2006 Sierra Leone Diamond Company Limited (AIM:SLD), the diamond and mineralexploration and production company with interests wholly focussed on the countryof Sierra Leone, today announces its audited results for the 12 months ended 31December 2006. Highlights • First alluvial diamond sales completed, fully compliant with the Kimberley Process Certification Scheme ("KPCS") - generating gross proceeds of approximately US$1.2 million • Significant investment in alluvial operations to establish processing capacity of two million tonnes of gravels per annum and a mining fleet with capacity to move 18 million tonnes of material per annum • Ongoing hard rock diamond exploration continuing - 200 potential kimberlite targets now identified and being followed up with a drill program • RSG Global Limited ("RSG"), the independent technical consultants, tasked to manage a sampling and resource definition drilling program on the Company's iron ore deposits to produce a compliant resource statement • Successful placing of 12,000,000 new common shares of US$0.01 each at a price of 115p to raise £13.8 million (US$27.0 million) before expenses • Cash at bank and short term deposits as at 31 December 2006 was US$23.6 million Post Year End Highlight • The Company completed its second diamond sale in April 2007. The sale of 10,105.91 carats, fully compliant with the KPCS, realised gross proceeds of approximately US$4.5 million at $441 per carat Commenting on the results, David Gadd-Claxton, Chief Executive Officer said: "2006 has been a year of progress for SLDC, with the development of our alluvialoperations and the progress of our multi-commodity exploration activities acrossour mineral licences in Sierra Leone. The Company remains focussed on SierraLeone, a country which the Board believes holds the potential for the discoveryof world class deposits, has a sound mining investment code and is activelyencouraging foreign investment." "Ongoing assessment of the deposits at Tonkolili and Marampa is encouraging andthe iron ore potential is looking particularly promising for the Company." For further information please contact: Sierra Leone Diamond Company Tel: +44 (0) 1442 257 246 David Gadd-Claxton Jamie Alpen Canaccord Adams Limited Tel: +44 (0) 20 7050 6500 Mark Ashurst Mike Jones Buchanan Communications Tel: +44 (0) 20 7466 5000 Bobby Morse Ben Willey Nick Melson Notes: The information in this announcement that relates to Exploration Results,Mineral Resources and or Ore reserves is based on information compiled by P IYoung, Pr. Sci Nat (reg. No 400270/05), who is a Member of the GeologicalSociety of South Africa. Paul Young is a full time employee of the Company andmeets the requirements as a qualified person for the purposes of the AIMGuidance Note on Mining, Oil and Gas Companies dated March 2006 in terms of thediamond industry and he has reviewed the diamondiferous statements in accordancewith the AIM Guidance Note . It should be noted that potential quantities inthis report are conceptual in nature and insufficient exploration has beenundertaken to define a Mineral Resource and it is uncertain if furtherexploration activities will result in the determination of a Mineral Resource. Chairman's Statement The past financial year has seen the activities of SLDC increase dramaticallyand the Company is focussed on following up the key exploration targets acrossits portfolio over the coming year. We established ourselves as a diamondproducer and additional investment in the Konama alluvial diamond operationsduring 2006 has created the necessary foundation for the Company to increaseproduction to a steady state level during 2007. Hard rock kimberliticexploration has produced further targets for follow up drilling, with samples ofinterest being gathered from the Lake Popei region. Following the success ofthe reconnaissance sampling and aeromagnetic survey programmes and theacquisition of two core drill rigs the Company is now in a position toaggressively undertake drill testing and analysis of the numerous kimberlitetargets generated to date within the licence portfolio. The early stage iron ore exploration results on the Tonkolili and Marampaprojects have been encouraging. RSG have undertaken a reinterpretation of theavailable SLDC aeromagnetic data over both survey areas. This work included areview of the data plus a structural and lithological interpretation of both theTonkolili and Marampa Iron Ore project areas followed by a ground truthingexercise. RSG are now undertaking a detailed surface and underground samplingprogramme at Tonkolili and, in conjunction with Fugro Ground Geophysics Pty Ltd,a ground gravimetric survey at Marampa. We are pleased to have RSG on board to help manage and provide technicalexpertise at our iron ore projects with the aim of producing a compliantresource statement for both areas as part of the ongoing prefeasibility project. The Company remains entirely focussed on Sierra Leone, a country largelyunexplored and rich in minerals. The government of Sierra Leone has created aplatform of transparency and accountability in order to maintain a democraticstate free of corruption. The country is committed to the KPCS implemented inearly 2003 for the marketing and sale of diamond production. SLDC has been andcontinues to be fully compliant with the KPCS. Review of Operations The progress of the Company during 2006 is testament to the broad range ofoperations SLDC has in Sierra Leone. Since the last interim report, the Companyhas announced detailed operational updates on 1 December 2006 and 8 March 2007,outlining the progress in our diamond, iron ore and gold activities. 2007 will be a year where the business will focus on the most promising areas ofour work which the Board believes will provide the Company with the best routesto delivering shareholder value. Alluvial Diamond Operations SLDC's strategy since it floated in 2005 has been to establish cash flows fromsteady state alluvial diamond production to provide financing for majorexploration programs. During the year, SLDC has combined historic information onthe alluvial potential of Sierra Leone, contained in the Hall Report, withfurther bulk sampling, drilling, pitting and the High Resolution Aero Magnetic("HRAM") survey. The Company has carried out limited bulk sampling activitiesand undertaken a review of production records from the previous mining company'sactivities in the area. In November 2005, SLDC applied to the Sierra Leone Government, via the Ministryof Mines, for a Mining Lease covering the Middle Bafi River area, in the KonoDistrict. This application was approved and four licences were granted betweenFebruary and April 2006 over an area of approximately 160 square kilometres,each at a cost of US$50,000 per annum. With a view to accelerating the development of the Company's alluvialactivities, SLDC purchased African Gold and Diamonds SA's mining plant andequipment at Tefiya in the Kono district of Sierra Leone for US$4 millionpayable in cash and shares. The Company subsequently renamed the operation the "Konama mine". The acquisition included processing plant which, after asubstantial upgrade, provided capacity to process two million tonnes of alluvialgravels annually. Further investment in the operations saw the construction ofan x-ray and diamond sort house, additional mining fleet and earth movingequipment as well as additional washing and separation plant. Total investment in the alluvial operations in 2006 was approximately US$29million. Diamond Sales The Company completed an initial sale of rough diamonds during September 2006 inAntwerp with the objective of confirming security, independent valuation andcompliance to the KPCS. A summary of the diamond sale is detailed below; Tender Results (Note: gr = grains) Description Carats US$ Average US$/ct +10.80 57.15 94,754.70 1,658.00 5-10ct 67.19 260,473.00 3,876.66 3-4ct 162.39 222,149.52 1,368.00 8-10gr 133.89 107,112.00 800.00 +2ct 434.87 109,080.00 250.83 -2ct 1,099.12 79,136.64 72.00 3-6gr 489.82 162,130.42 331.00 -3gr 558.40 90,222.00 161.57Sub-Total 3,002.83 1,125,058.28 374.67Miscellaneous 1,408.07 53,550.00 38.03 Total 4,410.90 US$1,178,608.28 267.20 Since the year end, SLDC has sold a further 10,105.91 carats at US$440.96 percarat, generating gross sale proceeds of US$4,456,288.39. The Company completedthe sale early April 2007 fully compliant with the Kimberley Certificationprocess and included 13 'special' diamonds (specials being defined as thosediamonds greater than 10.8 carats) totalling 200.45 carats and realising saleproceeds of US$958,226.87 at US$4,780.38 per carat. The Company engaged theservices of Overseas Diamonds NV, a diamond marketing company based in Antwerp,to undertake the sale, which attracted 17 diamond buyers. Kimberlite Exploration Since flotation, SLDC has completed the HRAM survey of potential kimberlitetargets in Sierra Leone. This has led to follow up work being concentrated inthree principal areas: • North West Region - Kagberi• North East Region - Kono• South Coastal Region - Lake Popei North West Region At Kagberi, SLDC excavated trenches over two proximal anomalies that resulted inthe recovery of a single 0.41 carat diamond from 157 cubic metres of materialincluding overburden. The trenches were located in close proximity to localartisanal workings and Company geologists reported the recovery of largerdiamonds by these local workers. Following a preliminary internal interpretationof all available data, the Directors believe that these diamonds have beenreleased from kimberlite structures underlying the area. A HRAM survey hasidentified 183 magnetic anomalies, which coupled with available sampling resultshas generated 139 kimberlite drill targets. North East Region Following the recovery of kimberlitic indicator minerals from the reconnaissanceprogramme in the Kono area in the early part of 2006, 44 drainages have beenidentified for follow up sampling. Strip sampling has also been undertakenaround the extensions to the known Kono dykes on SLDC held ground as well as inthe area around the village of Bumpe, where G10 and G9 garnets have beenrecovered by SLDC, in order to define the size and extent of this anomaly. Stripsampling by the Company continues to define and produce positive samplingresults and exploration trenching of these anomalies began in 2007. In an attempt to speed up the definition of these anomalies, Resonance AcousticProfiling is being trialed to identify the size and shape of the underlyingfeatures with the aim of generating further drill and sampling targets in thisarea. A further HRAM survey of the area has identified 11 large magnetic anomalies,with a further 20 magnetic anomalies ready for follow up drilling and sampling. South Coastal Region Lake Popei has provided further interest after 20 samples were taken foranalysis. As announced previously, one of the samples provided over 3,000ilmenite grains, with visible kimberlitic ilmenites being present in all but onesample. These results were independently confirmed by Mineral ServicesLaboratories in South Africa, with analysis concluding that the grains werederived from a kimberlitic rock source. The Company is currently undertaking adrilling programme in this area following the delivery of two drilling rigs.Once drilling of Lake Popei is complete the rigs will be assigned to drilling ofthe 17 priority kimberlite targets in the Sewa projects area. SLDC continues to evaluate drainage and magnetic targets on the Sewa Block, GoriHills and on its Coastal Licences with in excess of 50 target areas identified. Iron Ore Tonkolili Iron Ore Belt The Tonkolili iron ore deposit, located approximately 150 kilometres from thePepel deep water port near Freetown, has become a key area of focus, outside ofthe diamond activities of SLDC. During the period, 24 km of channel samplinghas been completed, with further infill surface trenching underway. RSG hasbeen managing the programme on behalf of SLDC and all of the data will beincorporated into a 3-D conceptual geological model. Additional ore samples havebeen collected for preliminary metallurgical testwork with results due in thesecond quarter of 2007. Core drilling, to a planned depth of 200 metres, hascommenced to determine the depth extent of the central mineralized zone. Corefrom these holes will be dispatched for further metallurgical test work andassay. Results from this test work are anticipated by July 2007. ReverseCirculation (RC) evaluation drilling is planned to commence in May 2007. Anevaluation programme of up to 200,000 metres is planned to be undertaken duringthe coming 12 months for the full pre-feasibility programme. The opportunity to generate early project cash flows will be assessed during thecoming three months. This will involve bulk sampling and metallurgical testwork of scree material on the flanks of the central mineralised zones. The government of Sierra Leone granted the Company an exploration licenceextension area immediately to the north of the existing Tonkolili project on 28February 2007 bringing the total area under licence at Tonkolili toapproximately 209 square kilometres. Surface trench sampling of the additionallicence is due to commence in the second quarter of 2007. Marampa Iron Ore At Marampa, which lies approximately 75 kilometres east of the Pepel deep waterport, a total of 11 potential hematite targets were identified by RSG as part ofthe structural reinterpretation. Fugro Ground Geophysics Pty Ltd has commencedground gravimetric surveying of these areas in order to identify haematite drilltargets. This survey is being conducted on 200 metre line spacing with stationsat 50 metre intervals and is due for completion late in the second quarter of2007. RSG is working closely with SLDC with the aim of producing compliant resourcestatements for both the Tonkolili and Marampa iron ore deposits as required fora full prefeasibility study. Gold and other mineralisation SLDC continues to assess the mineral potential of its licence areas in SierraLeone and to this end an assessment report has been generated by AF Wilkinson,an independent geological consultant, detailing the gold and base metalmineralisation potential from sampling in the Loko, Gori and Nimini Hills andthe Sula Mountains. Sampling teams, supervised by geologists from RSG, are conducting initialsampling programmes. Financial Review The financial performance of SLDC throughout 2006 reflects expenditure on fasttracking the construction and development of the alluvial operations andidentifying multiple kimberlite targets as well as the encouraging iron orepotential. The Company was pleased with the completion of its first diamond salein Antwerp which generated gross revenues for the Company of US$1.2 million. Loss after taxation for the 12 month period ended 31 December 2006 totalledUS$5.8 million (2005: US$5.0 million). Loss per share was 5.34 cents (2005: 5.32cents). The total assets of the Group amounted to approximately US$89.2 million as atthe year end which includes intangible assets amounting to approximately US$30.7million. Intangible assets relate to accumulated deferred exploration andevaluation costs in respect of the Company's licence interests in Sierra Leone.The Company's accounting policy is to capitalise these costs pendingdetermination of the feasibility of the project to which they relate. The grossloss on mine from the alluvial operations for the year to 31 December 2006 wasapproximately US$0.4 million. During the year, the Company completed an institutional placing of 12,000,000new common shares at a price of 115 pence per share, raising £13.8 million,before expenses. As at 31 December 2006, SLDC had cash at bank and short termdeposits of US$23.6 million (2005: US$15.9 million). The Company also receivedfunds during the year totalling US$19.6 million after issuing a total of21,240,001 new common shares from the exercise of various warrants and options. Social Development Since the Company re-commenced its activities in Sierra Leone in 2003 after theconflict, it has initiated a number of activities to support local communitiesand its indigenous work force. At the end of 2006, SLDC employed 646 localpersonnel as part of its exploration, production and local administrationactivities and is now one of the largest employers in the country. Employees ofthe Company undergo best practice training, in addition to health anddevelopment education programmes. The Company also pays agriculturalcompensation wherever its activities impact on the local farming activities andensures that the lives of people in the communities in which it operates areimproved through the implementation of social development programs and projects. Staff I would like to thank our staff for their continued hard work. We are in theprocess of consolidating our management team at the alluvial operations as wellas engaging additional experienced technical personnel to ensure success acrossthe Company's extensive portfolio of exploration projects. During the year we have been successful in engaging the services of thefollowing highly skilled technical staff. Paul Young has been employed as VicePresident, Exploration. He has more than 20 years experience in the mineralsindustry and held the positions of Group Mineral Resource Manager for theDebswana Diamond Mining Company and De Beers Exploration Manager in Botswana.Ian Tomlinson joined the Company as Principal Kimberlite Geologist and has over18 years of kimberlite prospecting experience in Africa, all gained during hisemployment with De Beers. Ian has led and managed prospecting programmes inBotswana, South Africa, Tanzania and Guinea. Alexander Meyer also joined SLDC tohead up our gold and base metal exploration activities. Alex is a highlyexperienced exploration geologist, having approximately 15 years experience onvarious gold and base metal exploration and production projects. Alex has workedin Australia, China and Botswana on various greenfield exploration and resourceevaluation programmes. The Company strengthened its Board in January 2007 with the appointment of JamieAlpen as Chief Financial Officer and Gordon Stein as Non-executive Director.Both directors have considerable experience in the natural resources sector andwill be instrumental in driving the business forward. SLDC also intends to makefurther appointments to its Board in anticipation of the growth of the Company'snon-diamond exploration projects. It is with sadness that the Company notes the death of Martin Dunham who wasFinance Director of the Company until July 2006. The Board acknowledges hiscontribution and support during the early growth stages of the Company. Outlook The Company aims to become a successful mid-tier diamond producer and explorerby: • achieving steady state economic alluvial diamond production, • assembling a highly prospective exploration portfolio ensuring future growth by identifying kimberlitic diamondiferous targets offering the potential for economic development, • analysing new business opportunities which meet rigorous acquisition criteria to further enhance growth, • establishing an efficient and effective diamond value chain to maximise revenue. The Company is also seeking to unlock shareholder value by undertaking detailedexploration and pre-feasibility study work programs on its non-diamondexploration assets in order to produce JORC compliant resource statementsindependently audited by industry recognised competent persons. We look forwardto the delivery of the iron ore resource statement by RSG, which will confirmthe size and quality of the deposits at Tonkolili and Marampa. The next diamondsale from production sourced wholly from its alluvial operations in the Konodistrict of Sierra Leone is scheduled for completion in June 2007. The Company is now well placed to increase shareholder value through acceleratedwork programs on its portfolio of exploration assets, the achievement of steadystate production at the alluvial operations and continues to enjoy the firmsupport of the Government and people of Sierra Leone. Frank TimisExecutive Chairman30 April 2007 SIERRA LEONE DIAMOND COMPANY LIMITEDCONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2006 Year ended Year ended 31 December 31 December Note 2006 2005 US$ US$ Revenue 1 1,077,560 - Cost of sales (1,520,037) - Gross loss (442,477) - Net operating expenses 3 (6,555,597) (6,351,396) Operating loss (6,998,074) (6,351,396) Interest receivable 7 215,759 829,689Interest payable 8 (34,710) - Loss before tax (6,817,025) (5,521,707) Tax 9 995,474 525,088 Loss for the year (5,821,551) (4,996,619) Basic and diluted loss per share - cents 10 5.34 5.32 All activities are continuing operations. There were no recognised gain and losses other than those stated above. SIERRA LEONE DIAMOND COMPANY LIMITEDCONSOLIDATED AND COMPANY BALANCE SHEETSAt 31 December 2006 Group Company Group Company 2006 2006 2005 2005 Note US$ US$ US$ US$Non-current assetsIntangible fixed assets 12 30,747,662 - 22,208,036 -Tangible fixed assets 13 31,035,102 - 6,240,249 -Investments 14 - 2 - 2Debtors 15 - 72,599,950 - 33,629,811Deferred tax asset 16 1,520,562 - 525,088 - Total non-current assets 63,303,326 72,599,952 28,973,373 33,629,813 Current assetsInventories 17 1,976,109 - - -Trade and other receivables 15 259,917 36,071 234,462 25,007Short term investments 18 21,538,435 21,538,435 15,480,000 15,480,000Cash and cash equivalents 19 2,095,756 2,089,754 461,843 222,786 Total current assets 25,870,217 23,664,260 16,176,305 15,727,793 Total assets 89,173,543 96,264,212 45,149,678 49,357,606 EquityShare capital 20 1,300,032 1,300,032 967,632 967,632Share premium account 101,056,581 101,056,581 54,255,510 54,255,510Equity reserves 1,940,026 1,940,026 3,211,082 3,211,082Translation reserve (311,744) (194,858) (311,744) (194,858)Profit and loss account (16,455,983) (7,988,191) (13,183,427) (8,988,477) Total equity 87,528,912 96,113,590 44,939,053 49,250,889 Non-current liabilitiesProvisions 22 438,962 - - - Total non-current 438,962 - - -liabilities Current liabilitiesTrade and other payables 23 1,205,669 150,622 210,625 106,717 Total liabilities 1,644,631 150,622 210,625 106,717 Total equity and 89,173,543 96,264,212 45,149,678 49,357,606liabilities The financial statements were approved by the Board on 26 April 2007 and weresigned on its behalf by: DAVID GADD-CLAXTON Director and Chief Executive Officer JAMIE ALPEN Director and Chief Financial Officer SIERRA LEONE DIAMOND COMPANY LIMITEDCONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2006 Year ended Year ended 31 December 31 December 2006 2005 US$ US$ Loss for the period before taxation (6,817,025) (5,521,707)Share-based payments 1,546,585 2,476,981Depreciation of tangible fixed assets 3,190,671 1,109,715Loss on disposal 82,728 -Interest received (215,759) (829,689)Interest paid 34,710 - Operating loss before working capital changes (2,178,090) (2,764,700)Increase in inventories (1,976,109) -(Increase)/decrease in trade and other receivables (25,455) 721,231Increase/(decrease) in trade and other payables 995,044 (1,505,064) Cash flow from operating activities (3,184,610) (3,548,533)Interest paid (34,710) - Net cash flow from operating activities (3,219,320) (3,548,533) Cash flows from investing activitiesInterest received 215,759 829,689Payments to acquire tangible assets (24,441,755) (4,420,105)Payments to acquire intangible assets (9,727,161) (13,215,616)Increase in short term deposits with banks (6,058,435) (15,480,000) Net cash outflow from investing activities (40,011,592) (32,286,032) Cash flows from financing activitiesProceeds of ordinary share issue 25,253,177 33,204,321Proceeds of exercise of options 5,165,255 -Proceeds of exercise of warrants 14,446,393 -Loan proceeds 3,100,000 -Loan repayment (3,100,000) -Increase in other reserves - 400,000 Net cash inflow from financing activities 44,864,825 33,604,321 Net increase/(decrease) in cash and cash 1,633,913 (2,230,244)equivalents Cash and cash equivalents at beginning of period 461,843 2,692,087 Cash and cash equivalents at end of period 2,095,756 461,843 SIERRA LEONE DIAMOND COMPANY LIMITEDCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 31 December 2006 Share Profit and Share premium Equity Translation loss capital account reserves reserves account Total Note US$ US$ US$ US$ US$ US$ As at 1 January 2005 700,632 21,318,189 334,101 (311,744) (8,186,808) 13,854,370Allotments during the 267,000 37,261,157 - - - 37,528,157yearIssue expenses - shares - (3,923,836) - - - (3,923,836)Issue expenses - warrants - (400,000) 400,000 - - -Share-based payments - 2,476,981 - - 2,476,981Loss for the year - - - - (4,996,619) (4,996,619) As at 31 December 2005 967,632 54,255,510 3,211,082 (311,744) (13,183,427) 44,939,053 As at 1 January 2006 967,632 54,255,510 3,211,082 (311,744) (13,183,427) 44,939,053Allotments during the 332,400 48,542,311 - - - 48,874,711yearIssue expenses - shares - (1,769,293) - - - (1,769,293)Issue expenses - warrants - (528,180) 528,180 - - -Share-based payments - - 1,305,992 - - 1,305,992Reserves transfer - - - (1,137,503) - 1,137,503 -optionsReserves transfer - - 556,233 (1,967,725) - 1,411,492 -warrantsLoss for the year - - - - (5,821,551) (5,821,551) As at 31 December 2006 20/21 1,300,032 101,056,581 1,940,026 (311,744) (16,455,983) 87,528,912 1. ACCOUNTING POLICIES Sierra Leone Diamond Company Limited is registered and domiciled in Bermuda andis listed on the AIM market of the London Stock Exchange. Statement of compliance The consolidated financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRS) adopted by the InternationalAccounting Standards Board (IASB), and interpretations issued by the StandingInterpretations Committee of the IASB. Basis of preparation The Group financial statements have been prepared in accordance with thehistorical cost basis and are presented in US dollars. All values are rounded tothe nearest dollar. The preparation of financial statements in conformity with IFRS requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historicalexperience and factors that are believed to be reasonable under thecircumstances, the results of which form the basis of making judgements aboutcarrying values of assets and liabilities that are not readily apparent fromother sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised if the revision only affects that period, or in the periodof revision and future periods if the revision affects both current and futureperiods. The accounting policies set out below have been applied consistently to allperiods presented in the financial statements by all Group entities. Basis of consolidation Subsidiaries The consolidated financial statements incorporate the financial information ofSierra Leone Diamond Company and its subsidiaries. Subsidiaries are thoseentities over whose financial and operating policies the Group has the power toexercise control. Where necessary, the accounting policies of the subsidiariesare adjusted to ensure consistency with the policies adopted by the Group. Transactions eliminated on consolidation Intra-group balances and any unrealised gains and losses or income and expensesarising from intra-group transactions, are eliminated in preparing theconsolidated financial statements. Intangible fixed assets Exploration and evaluation costs arising following the acquisition of anexploration licence are capitalised on a project by project basis pendingdetermination of the technical feasibility and commercial viability of theproject. Costs incurred include appropriate technical and administrativeoverheads. Deferred exploration costs are carried at historical cost less anyimpairment losses recognised. If an exploration project is successful, the related costs will be transferredto mining assets and amortised over the estimated life of mineral reserves on aunit of production basis. Where a project is relinquished, abandoned, or isconsidered to be of no further commercial value to the Company, the relatedcosts are written off. The recoverability of deferred exploration costs is dependent upon the discoveryof economically recoverable mineral reserves, the ability of the Company toobtain necessary financing to complete the development of mineral reserves andfuture profitable production or proceeds from the disposal thereof. 1. ACCOUNTING POLICIES (CONTINUED) Tangible Fixed Assets Exploration costs are capitalised as intangible fixed assets until a decision ismade to proceed to development. Related costs are then transferred to miningassets. Before reclassification, exploration costs are assessed for impairmentand any impairment loss recognised in the profit and loss account. Subsequentdevelopment costs are capitalised under mining assets, together with any amountstransferred from intangible exploration assets. Mining assets are amortisedover the estimated life of the commercial mineral reserves on a unit ofproduction basis. Plant and machinery, fixtures and fittings, motor vehicles and leaseholdimprovements are shown at cost less accumulated depreciation and impairmentlosses. The cost of tangible fixed assets is their purchase cost, together withany incidental cost of purchase. Depreciation is charged to the income statement on a straight-line basis overthe expected useful lives of the assets concerned. The depreciation rates are asfollows: %Plant and machinery 20-30Fixtures and fittings 20-30 Subsequent expenditure relating to a fixed asset item is capitalised when it isprobable that future economic benefits from the use of the asset will beincreased. All other subsequent expenditure is recognised as an expense in theperiod in which it is incurred. Repairs and maintenance which neither materiallyadd to the value of assets nor appreciably prolong their useful lives arecharged against income. Surpluses/(deficits) on the disposal of fixed assets arecredited/(charged) to income. The surplus or deficit is the difference betweenthe net disposal proceeds and the carrying amount of the asset. Financial instruments: Trade and other receivables Trade and other receivables are stated at cost less provision for doubtfuldebts. Cash and cash equivalents Cash and cash equivalents are measured at fair value, based on the relevantexchange rates at balance sheet date. Short-term Investments Deposits with financial institutions that are not repayable on demand withoutpenalty are classified as short-term investments and are included withininvesting activities in the cash flow statement. Interest on short-terminvestments is recognised on an accruals basis over the life of the investment. Derivative instruments Derivative instruments are measured at fair value. Impairment The carrying amounts of the Group's assets are reviewed at each balance sheetdate to determine whether there is any indication of impairment. An asset'scarrying value is written down to its estimated recoverable amount, being thehigher of its net selling price and value in use, if that is less than theasset's carrying amount. Impairment reviews for deferred exploration and evaluation costs are carried outon a project by project basis, as each project has the potential to be aneconomically viable cash generating unit. An impairment review is undertakenwhen indicators of impairment arise but normally when one of the followingconditions apply; - unexpected geological occurrences render a deposit uneconomic - title to an asset is compromised - variations in commodity prices render the project uneconomic - variations in the currency of operation - variations to the fiscal and tax legislation in the country of operation 1. ACCOUNTING POLICIES (CONTINUED) Borrowings Borrowings are initially recognised at fair value, net of transaction costsincurred. Borrowings are subsequently stated at amortised cost with anydifference between the proceeds (net of transaction costs) and the redemptionvalue recognised in the income statement over the period of the borrowings usingthe effective interest rate method. Revenue Revenue comprises gross diamond sale proceeds less selling costs. Selling costsinclude marketing commissions and costs, transportation, insurance and securitycosts and government royalty payments. Operating leases Payments made under operating leases are recognised on a straight-line basisover the term of the lease. Net financing costs Net financing costs comprise interest payable on borrowings calculated using theeffective interest rate method and interest receivable on funds invested. Deferred taxation Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit or loss. Deferred tax is provided using the full liability method. A deferred tax asset is recognised to the extent that it is probable that futuretaxable profits will be available against which the associated unused tax lossesand deductible temporary differences can be utilised. Foreign currencies Transactions denominated in foreign currencies are translated at the exchangerate ruling at the date of transaction. Monetary assets and liabilitiesdenominated in foreign currencies are translated at the rates of exchange rulingat the balance sheet date. Any gain or loss arising from a change in exchangerates subsequent to the date of the transaction is included as an exchange gainor loss in the profit and loss account. Inventories Inventories of rough diamonds, have been valued at estimated market valuesprevailing at 31 December 2006, with the amounts so determined reduced by theapplication of anticipated margins. The use of this method results in a carryingvalue of rough diamond inventory which approximates to the lower of cost and netrealisable value. Provisions Provisions are recognised when the Group has a legal or constructive obligationas a result of past events, for which it is probable that an outflow ofresources will be required to settle the obligation and the amount can bereliably estimated. The estimated cost of environmental rehabilitation on mine closure is based onthe present value of estimated costs and a provision is raised accordingly. Share- based payments The Group issues equity-settled share-based payments to certain directors,officers and employees. Equity-settled share-based payments are stated at fairvalue at the date of the grant and are expensed on a straight-line basis overthe estimated vesting period. The latter is based on the Group's estimate ofshares that will eventually vest. Fair value is measured by use of the Black-Scholes pricing model. The estimatedlife of the instrument used in the model has been adjusted, based onmanagement's best estimate, for the effects of non-transferability, exerciserestrictions and behavioural considerations. Segment reporting A segment is a component of the Group distinguishable by geographical location(geographical segment), or by its economic activity (business segment), which issubject to risks and rewards that are different from those of other segments. 2. GEOGRAPHICAL ANALYSIS OF EXPENSESYear ending 31 December 2006 Bermuda Sierra Leone UK Total US$ US$ US$ US$ Depreciation - 3,164,445 26,226 3,190,671Loss on disposal - 82,728 - 82,728Employee costs 1,023,923 97,829 279,883 1,401,635Foreign exchange differences (873,106) (5,375) (7,822) (886,303)Other operating charges 661,020 106,149 693,705 1,460,874Share-based payments 1,305,992 - - 1,305,992 2,117,829 3,445,776 991,992 6,555,597 Year ending 31 December 2005 Bermuda Sierra Leone UK Total US$ US$ US$ US$ Depreciation 7,767 1,090,136 11,812 1,109,715Employee costs 148,190 - 171,609 319,799Foreign exchange differences 478,608 2,807 1,376,032 1,857,447Other operating charges 161,679 - 425,775 587,454Share-based payments 2,476,981 - - 2,476,981 3,273,225 1,092,943 1,985,228 6,351,396 3. NET OPERATING EXPENSES 2006 2005 US$ US$ Depreciation 3,190,671 1,109,715Loss on disposal 82,728 -Employee costs 1,401,635 319,799Foreign exchange differences (886,303) 1,857,447Other operating charges 1,460,874 587,454 5,249,605 3,874,415 Share-based payments:Options (Note 21) 1,305,992 1,040,379Warrants (Note 21) - 1,436,602 1,305,992 2,476,981 6,555,597 6,351,396 Net operating expenses include: 2006 2005 US$ US$Auditors' remuneration:-audit services 150,000 135,000-other services 20,962 -Operating leases payments 52,440 71,235 4. DIRECTORS' EMOLUMENTS 2006 2005 US$ US$ Aggregate emoluments 823,131 724,667 Detailed disclosures of the director's remuneration and interests in shares andoptions over the Company's shares are shown in the Report of the RemunerationCommittee. No director has retirement benefits accruing to him as a result of his servicesto the Group. 5. EMPLOYEE INFORMATION The number of employees at the various mining and exploration operations(excluding the non-executive Directors of the Group) at the end of the periodwas 699 (2005: 174). 6. EMPLOYEE COSTS 2006 2005 US$ US$ Wages and salaries 8,849,695 4,115,570Social security costs 154,211 62,784 9,003,906 4,178,354 Employee costs include an amount of US$3,198,069 capitalised to tangible assetsand US$3,537,191 capitalised to intangible assets. (2005: Intangible assetsUS$3,858,555) 7. INTEREST RECEIVABLE 2006 2005 US$ US$ Interest receivable on short term investments 215,759 829,689 8. INTEREST PAYABLE 2006 2005 US$ US$ Interest payable on loan (See Note 27) 34,710 - 9. TAXATION 2006 2005 US$ US$ Deferred tax credit provided (Note 16) 995,474 525,088 10. LOSS PER SHARE 31 December 31 December 2006 2005 US$ US$ Loss for the year (5,821,551) (4,996,619) Shares Shares Basic weighted average number of common shares in issue 108,843,600 93,763,064 Basic loss per share - cents 5.34 5.32 Given the Group's loss for the year, the diluted loss per share is the same asthe basic loss per share. 11. COMPANY RESULT FOR THE FINANCIAL YEAR The result for the year for Sierra Leone Diamond Company Limited was a loss ofUS$1,548,709 (2005: loss US$3,037,264). 12. INTANGIBLE FIXED ASSETS Total US$CostAt 1 January 2006 22,208,036Additions 10,166,123Transfer to tangible assets (1,626,497) As at 31 December 2006 30,747,662 AmortisationAt January 2006 -Charge for the period - As at 31 December 2006 - Net book valueAt 31 December 2006 30,747,662 At 31 December 2005 22,208,036 Intangible fixed assets comprise of the cost of purchasing mineral explorationlicences and certain deferred exploration expenditures on the Company's minerallicences located in Sierra Leone. The directors regularly assess the potentialof each mineral licence and write off any deferred exploration expenditure thatthey believe to be unrecoverable. 13. TANGIBLE FIXED ASSETS Mining Plant & Fixtures & Assets machinery fittings Total US$ US$ US$ US$CostAt 1 January 2006 - 6,827,957 934,614 7,762,571Additions 10,574,932 15,826,531 40,292 26,441,755Transfer from intangible assets 1,626,497 - - 1,626,497Disposals - (165,456) - (165,456) As at 31 December 2006 12,201,429 22,489,032 974,906 35,665,367 DepreciationAt January 2006 - 1,356,015 166,307 1,522,322Charge for the year - 3,032,293 158,378 3,190,671Disposals - (82,728) - (82,728) As at 31 December 2006 - 4,305,580 324,685 4,630,265 Net book valueAt 31 December 2006 12,201,429 18,183,452 650,221 31,035,102 At 31 December 2005 - 5,471,942 768,307 6,240,249 14. INVESTMENTS Group Company Group Company 2006 2006 2005 2005 US$ US$ US$ US$ Cost and net book valueAt 1 January 2006 and 31 December 2006 - 2 - 2 The Company's investment comprises of a 100% interest in SLDC (UK) Limited acompany incorporated in the United Kingdom, which holds a 100% interest in SLDCManagement Limited a company incorporated in Sierra Leone. The principal activity of SLDC (UK) Limited is to provide accounting, legal andhuman resource services for the Group. The principal activity of SLDC Management Limited is to hold a 100% interest inSLDC Exploration Limited, which is the Group's operating company in SierraLeone. 15. TRADE AND OTHER RECEIVABLES Group Company Group Company 2006 2006 2005 2005 US$ US$ US$ US$Non-currentAmounts owed by Group companies - 72,599,950 - 33,629,811 - 72,599,950 - 33,629,811 CurrentTrade receivables 105,798 - 49,438 5,926VAT Recoverable 84,589 - 28,006 -Other debtors 7,598 25,429 14,872 -Due From Related Party - - - -Prepayments and accrued income 61,932 10,642 142,146 19,081 259,917 36,071 234,462 25,007 16. DEFERRED TAXATION Asset Liability NetRecognised deferred tax asset and liabilities US$ US$ US$2006 Property plant and equipment - 11,200,838 11,200,838Employee benefit plan (78,439) - (78,439)Site restoration provision (53,250) - (53,250)Tax loss carry forward (12,589,711) - (12,589,711) (12,721,400) 11,200,838 (1,520,562) Recognised Opening in Recognised Closing balance profit & loss in equity balanceMovement in temporary timing differences 2006 US$ US$ US$ US$ Property plant and equipment 4,047,575 7,153,263 - 11,200,838Employee benefit plan (14,349) (64,090) - (78,439)Site restoration provision - (53,250) - (53,250)Tax loss carry forward (4,558,314) (8,031,397) - (12,589,711) (525,088) (995,474) - (1,520,562) Asset Liability NetRecognised deferred tax asset and liabilities US$ US$ US$2005 Property plant and equipment - 4,047,575 4,047,575Employee benefit plan (14,349) - (14,349)Tax loss carried forward (4,558,314) - (4,558,314) (4,572,663) 4,047,575 (525,088) Recognised Opening in Recognised Closing balance profit & loss in equity balanceMovement in temporary timing differences 2005 US$ US$ US$ US$ Property plant and equipment - 4,047,575 - 4,047,575Employee benefit plan - (14,349) - (14,349)Tax loss carried forward - (4,558,314) - (4,558,314) - (525,088) - (525,088) 31 December 31 December 2006 2005Deferred Tax Account US$ US$ Balance brought forward (525,088) -Credit for the year (995,474) (525,088) (1,520,562) (525,088) 17. INVENTORIES 31 December 31 December 2006 2005 US$ US$ Diamonds held for sale 1,024,030 -Consumables and stores 952,079 - 1,976,109 - 18. SHORT TERM INVESTMENTS Group Company Group Company 2006 2006 2005 2005 US$ US$ US$ US$ Short term deposits with banks 21,538,435 21,538,435 15,480,000 15,480,000 21,538,435 21,538,435 15,480,000 15,480,000 19. FINANCIAL INSTRUMENTS The Group uses financial instruments comprising cash, liquid resources and itemssuch as short term debtors and creditors that arise from its operations. Theprincipal risks relate to currency exposure and liquidity. Short term debtorsand creditors have been excluded from the following disclosures. The Group uses financial instruments to maximise returns from funds held ondeposit. The Group's policy is to raise cash in advance of when it is requiredby analysing the costs and benefits of equity and debt financing. The breakdown of the Group and Company financial assets as at 31 December 2006is shown below: Group Company Group Company 2006 2006 2005 2005 US$ US$ US$ US$ Cash and bank balances 2,095,756 2,089,754 461,843 222,786Short term investments:Short term deposits with banks 21,538,435 21,538,435 15,480,000 15,480,000 23,634,191 23,628,189 15,941,843 15,702,786 In respect of monetary assets and liabilities held in other currencies than USdollars, the Group ensures that net exposure is kept to an acceptable level bybuying or selling foreign currencies at spot rates where necessary to addressshort term imbalances. Foreign exchange differences on retranslation of suchassets and liabilities are taken to the income statement. Financial assets consist of short-term deposits in US dollars and sterling whichearn market interest rates. 20. SHARE CAPITAL 31 December 31 December Number of 2006 Number of 2005 shares US$ shares US$AuthorisedCommon shares of US$ 0.01 each 250,000,000 2,500,000 250,000,000 2,500,000Preference shares of US$ 0.01 each 100,000,000 1,000,000 100,000,000 1,000,000 Issued and fully paidAt 1 January 2006 96,763,240 967,632 70,063,240 700,632Issued during the year 33,240,001 332,400 26,700,000 267,000At 31 December 2006 130,003,241 1,300,032 96,763,240 967,632 i. On 9 January 2006 50,000 new common shares were issued for consideration of US$53,899 pursuant to the termination of an employment contract. ii. On 3 February 2006 1,930,000 new common shares were issued for consideration of US$2,000,000 as part of a contract to purchase mining equipment. iii. On 26 April 2006 4,528,000 new common shares were issued for consideration of US$4,000,000 on the exercise of share purchase warrants. iv. On 17 May 2006 2,575,520 new common shares were issued for consideration of US$2,410,442 on the exercise of share options. v. On 24 May 2006 199,480 new common shares were issued for consideration of US$186,694 on the exercise of share options pursuant to the termination of an employment contract. vi. On 19 June 2006 200,000 new common shares were issued for consideration of US$181,595 on the exercise of share options. vii. On 29 June 2006 4,988,667 new common shares were issued for consideration of US$5,000,000 on the exercise of share purchase warrants. viii. On 3 July 2006 250,000 new common shares were issued for consideration of US$232,918 on the exercise of share options. ix. On 13 July 2006 1,335,000 new common shares were issued for consideration of US$1,865,669 on the exercise of share purchase warrants. x. On 28 September 2006 2,000,000 new common shares were issued for consideration of US$2,340,300 on the exercise of share options. xi. On 29 September 2006 3,183,334 new common shares were issued for consideration of US$3,580,724 on the exercise of share purchase warrants. xii. On 11 December 2006 12,000,000 new common shares were issued by way of a placing for gross proceeds of US$27,022,470 before issue expenses of US$1,769,293. 21. EQUITY RESERVES a) OPTIONS The Group has issued share options under a share option scheme adopted by theGroup on 5 November 2004. Movements in share options over US$ 0.01 common sharesin the Company were as follows: 2006 2005 Weighted 2006 Weighted 2005 average price Number average price Number Outstanding at beginning of year 56.6p 11,125,000 51.8p 6,975,000Lapsed during year 50.0p (900,000) 65.7p (800,000)Exercised during year 54.8p (5,225,000) -Granted during year 86.4p 825,000 64.9p 4,950,000 Outstanding at the end of the year 63.5p 5,825,000 56.6p 11,125,000Exercisable at the end of the year 2,708,333 4,625,000 The fair value of options granted during the year was estimated using theBlack-Scholes pricing model with the following significant assumptions: Expected life (years) 4.1Risk-free interest rate 4.58%Volatility 72%Weighted average fair value per option $0.33 The stock-based compensation recognised as an expense in the year to 31 December2006 was US$1,305,992 (2005: US$1,040,379). A transfer of US$1,137,503 was madefrom the equity reserve to the profit and loss reserve during the year. Thisrepresented the reversal of the charge made through the Income Statement priorto 2006 for options exercised in 2006. Total options existing at 31 December 2006 over US$ 0.01 ordinary shares in theCompany are summarised below: At At 31 December 31 DecemberDate of grant Exercise Price Expiry Date Note 2006 2005 21 November 2004 50p 21 November 2007 1 - 1,825,000 21 November 2004 50p 21 November 2009 1 1,000,000 2,250,000 21 November 2004 50p 21 November 2009 2 800,000 1,650,000 21 November 2004 50p 21 November 2009 4 - 200,000 30 November 2004 50p 30 November 2009 3 100,000 100,000 16 December 2004 50p 16 December 2009 3 150,000 150,000 10 February 2005 75p 10 February 2010 3 250,000 250,000 31 March 2005 75p 31 March 2010 2 1,000,000 2,000,000 01 November 2005 50p 01 November 2010 2 1,000,000 2,000,000 19 July 2005 75p 19 July 2010 2 300,000 300,000 07 September 2005 75p 07 September 2010 2 400,000 400,000 28 February 2006 50p 28 February 2011 2 75,000 - 05 April 2006 75p 05 April 2011 2 500,000 - 16 October 2006 120p 16 October 2008 5 250,000 - Note 1: Subject to the rules of share option scheme each of these options were fullyvested on 10 May 2005. Note 2: Subject to the rules of the share option scheme each of these options wereexercisable as follows: - one-third of the share options on the first anniversary of the date of grant - a further third of the share options on the second anniversary of the date of grant - the final third of the share options on the third anniversary of the date of grant; provided that the option holder has remained a director or employee of theCompany or one of its subsidiaries throughout the one-year period prior to theapplicable anniversary of the date of grant. Except that any share options thathave previously vested cannot be cancelled by the Company unless the employee isdismissed for cause. Note 3: The performance based options vest upon certain performance milestones beingmet. The vesting period for these is not determinable and an expense is onlyrecognised upon actual vesting. Note 4: Subject to the rules of the share option scheme, these performance based shareoptions became fully vested during 2005. Note 5: Subject to the rules of the share option scheme, these share options becamefully vested during 2006. Details of share options exercised and lapsed during the year are as follows: Exercise Number of options price Date of Grant Date of exercise exercised/lapsed David Gadd-Claxton 50p 22 November 2004 3 July 2006 250,000Estate of Martin Dunham 75p 30 March 2005 28 September 2006 1,000,000 50p 1 November 2005 28 September 2006 1,000,000Senior management 50p 22 November 2004 17 May 2006 2,575,520 50p 22 November 2004 24 May 2006 199,480 50p 22 November 2004 19 June 2006 200,000 50p 22 November 2004 Lapsed 900,000 b) WARRANTS Movements in warrants over US$ 0.01 common shares in the Company in the yearwere as follows: Number of warrants As at 1 January 2006 14,535,001Warrants granted in the year 600,000Warrants lapsed in the year -Warrants exercised in the year (14,035,001) As at 31 December 2006 1,100,000 CA Fiduciary Services as Trustees of the Timis Trust which wholly owns TimisDiamond Corporation holds 500,000 warrants exercisable at 75 Canadian centsexpiry 30 June 2008 in the name of CA Nominees Limited. Frank Timis is abeneficiary of The Timis Trust. The fair value of warrants included as a share issue cost and charged to theShare Premium Account was US$528,180 (2005: US$ US$400,000). A transfer ofUS$556,233 was made from the equity reserve to the share premium account duringthe year. This represented the reversal of the charge made against the sharepremium account prior to 2006 for warrants exercised in 2006. A transfer ofUS$1,411,492 was made from the equity reserve to the profit and loss accountreserve, representing the charge previously expensed through the IncomeStatement on warrants exercised in 2006. The fair value of warrants issued in the year was estimated using theBlack-Scholes pricing model with the following significant assumptions. Expected life (years) 1.5Risk-free interest rate 5.10%Volatility 61%Weighted average fair value per warrant $0.88 Total warrants existing at 31 December 2006 over US$ 0.01 ordinary shares in theCompany are summarised below: Date of grant Number of warrants Exercise Price US$ Original Expiry Date Revised Expiry Date July 2004 500,000 0.63 June 2006 June 2008December 2006 600,000 2.25 June 2008 June 2008 22. PROVISIONS Group Company Group Company 2006 2006 2005 2005 US$ US$ US$ US$ Employee benefit provision 261,462Alluvial mine restoration 177,500 - - - 438,962 - - - 23. TRADE AND OTHER PAYABLES Group Company Group Company 2006 2006 2005 2005 US$ US$ US$ US$ Trade creditors 417,857 622 170,988 106,717Other taxes and social security 603,729 - 39,637 -Accruals 184,083 150,000 - - 1,205,669 150,622 210,625 106,717 24. OPERATING LEASE COMMITMENTS At 31 December, the Group had annual commitments under non-cancellable operatingleases expiring: Land & Plant & Land & Plant & buildings equipment buildings equipment 2006 2006 2005 2005 US$ US$ US$ US$ Within one year 43,991 - 17,492 -Between two and five years - 3,908 43,000 - 25. CAPITAL COMMITMENTS At 31 December 2006, amounts contracted for but not provided in the financialstatements for the acquisition of property, plant and equipment amounted toUS$0.52m (2005: US$ nil). 26. POST BALANCE SHEET EVENTS On 3 April 2006, the Company completed the sale of 10,105.91 carats at US$440.96per carat, generating gross sale proceeds of US$4,456,288.39. The sale, fullycompliant with the Kimberley Certification process, included 13 'special'diamonds (specials being defined as those diamonds greater than 10.8 carats)totalling 200.45 carats and realising sale proceeds of US$958,226.87 atUS$4,780.38 per carat. 27. RELATED PARTY TRANSACTIONS During the year the US$48,232 excluding VAT in respect of office rental costsand US$2,226 excluding VAT for miscellaneous office services was payable toRegal Petroleum PLC, of which Mr Franco Scolaro is also a Director. No balancewas due at the year end. During the year the Company entered into a loan agreement with Timis DiamondCorporation Limited ("TDC"). Under the terms of the Loan Agreement, TDC agreedto lend the Company the sum of US$3.1 million with interest to accrue at therate of 1% plus the annual rate of interest equal to the arithmetic mean of therates offered to lending banks in the London interbank market at 11.00am on 17October 2006 for the offering of deposits in US Dollars for the amount of theLoan for 12 months. The Loan was fully repaid during the year including interestamounting to $34,710. All legal charges associated with the loan were released. TDC, is wholly owned by CA Fiduciary Services Limited as sole trustee of theTimis Trust. Mr Frank Timis is a beneficiary of the Timis Trust. TDC owned 31.4%of the issued and fully paid common shares of US$0.01 each of the Company at thebalance sheet date. 28. REPORTING JURISDICTIONS The Company is a reporting issuer in certain Canadian jurisdictions. However,the company is a "designated foreign issuer" as defined in Canadian NationalInstrument 71-102 and is subject to foreign regulatory requirements, includingthose of the AIM market of the London Stock Exchange. As such, the company isexempt from certain requirements otherwise imposed on reporting issuers inCanada. In particular, financial statements of the company may be preparedunder International Financial Reporting Standards or accounting principles thatmeet the non-Canadian disclosure requirements to which the company is subject. 29. STATUTORY ACCOUNTS The financial information set out above does not constitute the Group'sstatutory information for the year ending 31 December 2006, but is derived fromthose accounts which will be sent to shareholders shortly. The auditors havereported on these accounts and their report was unqualified. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AMI.L